Association News

Standard Operating Procedure Law effective April 20, 2022 impacts all brokerages

Recently, a number of laws have been passed in New York State pertaining to fair housing and these laws have significant impact for real estate licensees.  One of these laws requires real estate brokers who service residential homebuyers to create and publish “Standardized Operating Procedures” (the “SOP Law”) for their brokerage offices so that prospective homebuyers understand what will be required from them when working with a real estate broker.  There is some confusion surrounding the “SOP Law” because it was amended by a “Chapter Amendment” that was signed into law on March 15, 2022. 
The Chapter Amendment for the SOP Law gives the New York State Department of State (the “DOS”) the ability to hold public hearings and provide further regulatory guidance on the requirements of the SOP Law.  At this time, the DOS has elected not to hold public hearings or to add additional requirements to the SOP Law (but the DOS has reserved the right to do so in the future.)  The Chapter Amendment also extends the effective date of the law to April 20, 2022.  Brokers and their associated licensees (including teams) must be in compliance with the SOP Law by April 20, 2022 or be subject to discipline by the DOS.  In addition, the Chapter Amendment removed the requirement for brokers to submit and file their standardized operating procedures with the DOS. 
 The SOP Law requires a real estate broker to provide specific guidance to prospective homebuyers regarding three questions: (1) whether prospective clients shall show identification, (2) whether an exclusive broker agreement is required, and (3) whether pre-approval for a mortgage loan is required. To be clear, a real estate broker is not required to ask for any of these three things.  The real estate broker is simply required to let homebuyers know whether or not they will require any one, two or three of these items. 
 For example, a real estate broker can create a policy (the “Broker’s Procedures”) that states the following: “Please be advised that prior to showing a homebuyer a property: (1) we do not require identification from a prospective homebuyer, (2) we do not require a homebuyer to sign an exclusive brokerage agreement and (3) we do not require a pre-approval for a mortgage loan in order to show a homebuyer properties.”
Accordingly, we are recommending that a real estate broker: (i) decide what, if any, of the above items they will require from every prospective homebuyer, (ii) make the Broker’s Procedures available to the public by posting them on any public facing websites and/or mobile applications the broker maintains, (iii) ensure that any of the broker’s individual agents or teams that have public facing websites or mobile applications also post the Broker’s Procedures on such platforms, (iv) should create a “hardcopy” of the Broker’s Procedures at every office location and provide them to prospective homebuyers upon request, and (v) retain all copies of the various iterations of the Broker’s Procedures indefinitely, in order to demonstrate what procedures had been required from time to time and when such procedures had been changed. The initial Broker’s Procedures must be date stamped and notarized as well as posting to public facing websites and mobile applications.  If alterations or updates are made to the Broker’s Procedures, they must be date stamped, notarized and posted to public facing websites and mobile applications within 30 days of the alteration.
There is currently no information as to where on the real estate broker’s website and/or mobile application the Broker’s Procedures are to be posted.  The DOS has always adopted a “clear and conspicuous” standard in other laws and regulations related to required postings on websites and/or mobile applications.  As a best practice, the posting of the Broker’s Procedures should follow the same standard.
Situations may arise where the instructions of a seller or another real estate broker may vary from the Broker’s Procedures (i.e. the Broker’s Procedures may not require a homebuyer to provide identification, but the seller may request identification).  Accordingly, this possibility should be explained to prospective homebuyers and the fact that the broker may be obligated to follow the instructions of the seller even if it is contrary to the Broker’s Procedures.
All agents and teams that are associated with the real estate broker must follow the Broker’s Procedures.  For example, if the real estate broker does not require identification from a prospective homebuyer then the agents and teams cannot require identification from the prospective homebuyer (unless the identification was required by a seller or another real estate broker.)
Important Tip:
Please note that the suggestions contained in this document may be amended if the DOS provides further regulatory guidance on the SOP Law or we have further direction to provide to you.  We also strongly encourage you to speak to your own legal counsel and marketing departments as to the best way to implement these suggestions.  Please click here for an example of a Standardized Operating Procedure template that a real estate broker can use to summarize the Broker’s Procedures. More information and FAQs can be found here.

NYSAR Call for Action

Take Action Now! The state Legislature is considering passage of “Good Cause Eviction” legislation, which would restrict the ability of a landlord to evict a tenant, even in cases where their lease has expired so long as the tenant continued to pay rent. The bill (S.3082/A.5573) would also effectively cap annual rent increases to 3% or 1.5 times the CPI for most rental properties statewide with four units or more, unless the landlord is able to prove before a judge that an increase above that threshold is necessary or reasonable.
Urge your state lawmakers to oppose “Good Cause Eviction” legislation by filling out the petition here. This petition is part of NYSAR’s coalition efforts to oppose “Good Cause Eviction” as we partner with other real estate and business groups across the state.
“Good Cause Eviction” would simply make it less affordable to provide rental housing, severely discourage real estate investment, and ultimately drive up rents for tenants. Thank you for making your voice heard on this important issue.
Complete the Call for Action by copying and pasting the following link into your browser or clicking on the button below:
https://www.hfaany.com/take-action
NYSAR News Flash
On December 21, 2021, Governor Kathy Hochul signed a series of new fair housing bills into law. NYSAR is proud to have worked with state lawmakers over the last two years to strengthen fair housing laws in New York State and is committed to educating REALTORS® about these new laws and regulations. Below is a description of the new fair housing laws along with any proposed chapter amendments where applicable. NYSAR will continue to post updates when they occur.
 

Adds 2 hours of implicit bias education for real estate licensees within the 22.5 hours of CE requirements.
Update: Governor Hochul and the Legislature have agreed to a chapter amendment (S.7769) that will extend the effective date to September 21, 2022 (9 months after being signed into law).
 

Adds 2 hours of cultural competency education for real estate licensees within the 22.5 hours of CE requirements.
Update: Governor Hochul and the Legislature have agreed to a chapter amendment (S.7770) to define “cultural competency” as “understanding cultural norms, preferences and challenges within our diverse communities;” and will extend the effective date to September 21, 2022 (9 months after being signed into law).
 

Requires the Department of State (DOS) to develop regulations pertaining to requiring brokerages to institute standard operating procedures (SOPs) and submit them to the DOS.
Update: Governor Hochul and the Legislature have agreed to a chapter amendment (S.7729) that will also require real estate brokers to date stamp, notarize and post SOPs on any public websites, mobile apps, and upon request, at any office locations. Any alterations to SOPs must also be date stamped and notarized within 30 days and archived by the broker. Affirmation of compliance to the DOS will be required of brokers at the time of renewal of a license. The effective date will be extended to April 20, 2022; however the DOS will still have to go through the regulatory process which could extend the date brokers would be required to comply.
 

Increases pre-licensing broker and salesperson course hour requirements to 152 hours and 77 hours, respectively, with 6 hours focused on fair housing for salespersons; and requires instructors’ compliance in course education under oath.
Update: Governor Hochul and the Legislature have agreed to a chapter amendment (S.7730) that allows for instructors to submit an oath of compliance electronically, and will extend the effective date to December 21, 2022 (1 year after being signed into law).
 

Adds an additional $30 surcharge to the license fee for real estate brokers and an additional $10 surcharge to the license fee for real estate salespersons to be used for statewide fair housing testing efforts.
Update: Governor Hochul and the Legislature have agreed to a chapter amendment (S.7731) that makes technical changes to the distribution of funds into an anti-discrimination in housing fund and will extend the effective date to January 20, 2022 (30 days after being signed into law).
 

Increases the maximum fine for real estate license violations from $1,000 to $2,000, with new funds dedicated to a new anti-discrimination in housing fund.
Update: Govenror Hochul and the Legislature have agreed to a chapter amendment (S.7728) that makes technical changes to the obligations and reporting requirements of the state Attorney General pertaining to conducting fair housing testing; and will expedite the effective date to January 20, 2022.
 

Requires two years’ experience as an associate broker before designation as an office manager; and establishes a standard for the supervision of real estate agents and associate brokers by office managers that is equivalent to that of a licensed broker.
This bill was signed into law without any changes and is now in effect.
 

Requires the state to establish a telephone hotline for housing discrimination complaints.
This bill was signed into law without any changes and will go in effect April 20, 2022 (120 days after being signed into law).

 

Find NAR’s Commercial Issues and Actions HERE

Fair Housing regulations effective June 20, 2020 will have an impact on real estate related activities.

The new Fair Housing regulation is divided into three sections, Housing and Anti-Discrimination Disclosure Form, Fair Housing Notice and video and audio recording of all Fair Housing continuing education courses.  Below, please find guidance in the form of questions and answers as to how to comply with each section.

Brokers and licensees will need to provide a link on their website to the Fair Housing Notice (FHN) by June 20, 2020.  “All websites created and maintained by real estate brokers, associate real estate brokers, real estate salespersons and any real estate team…shall prominently and conspicuously display on the homepage of such website” a link to the FHN provided by the DOS.  By prominently and conspicuously, the link should appear “above the fold” and should not require a consumer to scroll down the webpage to find the link. 

Here is the link that must be provided: https://www.dos.ny.gov/licensing/docs/FairHousingNotice_new.pdf

View this video webinar for a more detailed explanation of the new Fair Housing regulations from NYSAR Director of Legal Affairs, Anthony Gatto.

https://vimeo.com/429407212

Visit https://www.nysar.com/legal/faq-fair-housing/ for more information and FAQs from NYSAR. 

Forms

Housing and Anti-Discrimination Disclosure Form (HADF)

Fair Housing Notice

Fair Housing Regulation

 

COVID-19 Updates

Please visit www.NYSAR.com for all statewide information regarding COVID-19. 

"NYSAR is committed to keeping you informed with updates and resources regarding the impact of COVID-19 (coronavirus) on your business and industry. Keep checking back—this page will be updated regularly with new information. For more on how to protect yourself and your families, visit the Centers for Disease Control and Prevention website."

Resources include: 

COVID-19 FAQ’s

NYSAR Updates

Please visit the NAR website for national updates regarding COVID-19. 

NAR Resources for Commercial Real Estate

NAR COVID -19 Policy and Advocacy